AI Boosts Bangladesh’s Textile Industry Competitiveness

Isabella Laurent
6 Min Read

Bangladesh’s Textile Industry Embraces AI for Enhanced Competitiveness and Transparency

Published: October 13, 2025

In a significant move aimed at modernizing its textile sector, Bangladesh’s textile manufacturers’ federation, known as the BGMEA, has forged a partnership with Digital Bridge Partner, a company specializing in B2B ecosystems. This collaboration is set to leverage artificial intelligence (AI) to improve traceability and competitiveness within the local textile industry, a sector that has long been the backbone of the Bangladeshi economy.

The Digital Factory Passport Initiative

At the heart of this initiative is the introduction of a Digital Factory Passport (DFP), which will be implemented across various factories in Bangladesh. This digital tool is designed to serve as a comprehensive framework for social and environmental compliance, addressing a critical need in an industry often criticized for its labor practices and environmental impact. The DFP aims to streamline the auditing process, which many manufacturers have described as cumbersome and time-consuming.

“The DFP will serve as a unified digital tool to streamline factory-level data management and reporting, reduce audit fatigue, and enhance the efficiency of monitoring sustainability performance,” stated the BGMEA. This initiative is expected to not only simplify compliance but also improve the overall transparency of the industry, making it more attractive to international brands.

Aiming for Global Leadership

BGMEA’s president, Mahmud Hasan Khan, and vice-president, Vidiya Amrit Khan, expressed optimism about the partnership, suggesting that it could position Bangladesh as a leading destination for brands seeking ethically produced garments. “This collaboration will help us ensure that our products are made with respect for both the environment and the workers,” they noted.

The stakes are particularly high for Bangladesh, which has faced challenges in maintaining its competitive edge in the global textile market. The country has been subjected to a 20% tariff on its exports to the United States, a decision made during Donald Trump’s administration. Despite these hurdles, Bangladesh remains a key player in the global textile supply chain, ranking third among apparel suppliers to the U.S., following China and Vietnam.

Economic Significance of the Textile Sector

The textile industry is crucial to Bangladesh’s economy, accounting for approximately 80% of the country’s total exports and contributing around 20% to its GDP. The sector also provides direct employment to around four million people, making it a vital source of livelihood for many families.

Historically, Bangladesh’s competitive advantage has stemmed from its low labor costs, especially in comparison to China, which increased its minimum wage in the early 2010s. However, this reliance on low wages has made the country vulnerable to fluctuations in global demand and changing trade policies.

In 2024, the U.S. imported $7.5 billion worth of textiles and clothing from Bangladesh, while the European Union imported €4.3 billion. These figures underscore the importance of maintaining strong trade relationships, particularly as global supply chains continue to evolve.

The Role of Technology in Sustainability

The integration of AI and digital tools like the DFP is not just about compliance; it also represents a broader shift towards sustainability in the textile industry. As consumers become increasingly aware of the environmental and social implications of their purchases, brands are under pressure to demonstrate their commitment to ethical practices.

The DFP is expected to facilitate better tracking of materials and labor practices, allowing brands to provide more transparent information to consumers. This could enhance brand loyalty and open new markets for Bangladeshi textiles, particularly among environmentally conscious consumers.

Challenges Ahead

Despite the promising outlook, the implementation of the DFP and the broader adoption of AI in the textile sector will not be without challenges. The transition to digital systems requires significant investment in technology and training for workers, many of whom may be unfamiliar with such tools. Additionally, the success of this initiative will depend on the willingness of manufacturers to embrace change and adapt to new compliance standards.

Moreover, the global textile market is highly competitive, with countries like Vietnam and India also vying for a larger share. To maintain its position, Bangladesh must not only improve its compliance and sustainability practices but also innovate continuously to meet the evolving demands of international buyers.

Conclusion

The partnership between BGMEA and Digital Bridge Partner marks a pivotal moment for Bangladesh’s textile industry. By harnessing AI and implementing the Digital Factory Passport, the country aims to enhance its competitiveness and transparency in a challenging global market. As the textile sector continues to evolve, the focus on sustainability and ethical practices will be crucial for securing its future. With the right strategies in place, Bangladesh could solidify its status as a leading player in the global textile supply chain, benefiting both its economy and its workforce.

Share This Article
Isabella Laurent is a fashion editor focusing on global fashion weeks, couture, and sustainable style. She blends luxury trendspotting with a passion for ethical fashion.
Leave a review